US Custom House sold again, this time to Boston-area firm

US Custom House (image courtesy Wikipedia Commons)

BY BRIAN LIBBY

Portland and Boston have had numerous connections over the years. The original coinflip that gave Portland its name (after the city in Maine) could alternatively have seen it named Boston. One of Portland's largest corporate headquarters is Adidas, which owns Boston area-based Reebok. Boston may be to New York what Portland is to Seattle: the smaller but sometimes scrappier of two regional cultural capitols. After the Portland Trail Blazers' greatest star, Bill Walton, parted with the franchise a couple years after winning the team won the 1977 NBA championship and he the 1978 MVP, he eventually made his way to the Boston Celtics, winning a second title there and a sixth-man-of-the-year award.

Enter Woburn, Massachusetts' Eastern Real Estate a privately held commercial real estate firm founded in 2000, with a development portfolio totaling over $1 billion. Eastern announced today that it will acquire the United States Custom House for on NW Broadway for $4.74 million from the Government Services Administration.

In our last installment of this ongoing saga, in 2011, local developer PREM Group was unable to finalize its purchase from the government after agreeing to a $2.75 million sale in 2010; PREM had initially beat out other interested parties such as local developer Joe Weston. The dissolution of the sale may have had something to do with the amount of maintenance the building may need. As Wendy Coverwell reported in the Portland Business Journal last November, back in 1997, Sera Architects estimated the building needed $18 million to $24.3 million in repairs, in 2009 dollars.

The 78,838-square foot, four-story building encompasses a full block in the Pearl District, bounded by NW Broadway, Everett and Davis Streets, and NW Eighth Avenue. Originally built in 1901, it was designed by James Knox Taylor, who - ironically now given the current sale - had studied at the Massachusetts Institute of Technology and designed many government buildings. Construction was supervised by local architect Edgar Lazarus, who also designed local/regional landmarks like Vista House at Crown Point in the Columbia River Gorge and one of the major buildings for the Lewis & Clark Exposition of 1905. The latter is particularly notable, because this world's fair marked one of the most important turning points in Portland's history: when the muddy streets, plank roads and Victorian houses of a large frontier town gave way to a major American city. The Custom House, which was listed in the National Register of Historic Places in 1974, expresses that growing ambition, with an Italian Renaissance Revival style: grafting the lines of quintessential historic city-states like Venice onto the DNA of a metropolis still in its infancy.

As its name indicates, for the building's first 67 years the US Custom Service was located there, before the agency moved next door to the post office in 1968 - itself a building now destined to be either reimagined or torn down with the letter carriers set to move out. For several years the Army Corps of Engineers had its offices in the Custom House, and then the Portland International School became one of a handful of potential candidates to nearly move in. It almost became home to the University of Oregon's Portland campus, which instead renovated the cast-iron White Stag Block along the waterfront at Naito Parkway and NW Couch Street. A major boutique hotel chain also had at one point joined the potential suitors.

In its press release, the developers seem to say the right things. “We are thrilled and honored to be the new stewards of this important piece of Portland history,” co-founder Brian Kelly of Eastern Real Estate is quoted as saying. “It is an absolute gem of the Pearl District and the city, and we look forward to the building’s active use on the North Park Blocks.” The key words there, of course, are stewards and active. But as we know, press releases and statements of intent only mean so much. And Eastern does have an interesting track record. Although their portfolio seems heavy on shopping and retail, which could easily mean a lot of ubiquitous chain stores, the company is widely known for converting the 1.2 million square foot former Wang Laboratories corporate headquarters in Lowell, Massachusetts into a multi-tenant office tower called Cross Point. On the website, the fact that the building was purchased for a mere $525,000 and sold four years later for over $100 million. So regardless of whether Eastern is successful, they not stay the owners forever.

Program-wise, the company has not yet indicated whether the Custom House will have a variety of tenants, just one, or a few. But the new owner seems to recognize that the building's value lies not in the structure itself, which needs repairs, but in its long-term value as a historic property of a large scale with the ability, like the Brewery Blocks, to attract hoardes of people. According to an Oregonian report by Elliot Njus published today, the company says tenants have not yet been determined.

The Custom House is also ideally situated on NW Broadway, the border between the tony Pearl District and the rougher but burgeoning Old Town, with downtown just a few blocks to the south. It's also just a few blocks from the trains of Union Station as well as the MAX line. It also looks out on the North Park Blocks, just across the street from a cluster of art galleries and the Museum of Contemporary Craft; 511 Broadway, itself being converted into a home for the Pacific Northwest College of Art, is also just a couple blocks down Broadway. Powell's Books and the Brewery Blocks are also an easy stroll, as are any number of cultural offerings, shops and public spaces.

GBD Architects, which has a now extensive history of green renovations in the Pearl District, such as the five-building Brewery Blocks mixed use development, the Portland Armory (now home to the Gerding Theater), and an in-progress renovation of the Meier & Frank warehouse into a headquarters for Danish wind turbine manufacturer Vestas. KPFF Consulting Engineers is also on the team.

This is a magnificent piece of historic architecture. I know the structural issues will be a huge challenge. It appears that the prospective new owners have signed up a good local team of professionals. That's good news, as well.